Supply Base Report: SBE Latvia Ltd.
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1 Supply Base Report: SBE Latvia Ltd
2 Completed in accordance with the Supply Base Report Template Version 1.2 For further information on the SBP Framework and to view the full set of documentation see Document history Version 1.0: published 26 March 2015 Version 1.1 published 22 February 2016 Version 1.2 published 23 June 2016 Copyright The Sustainable Biomass Partnership Limited 2016 Supply Base Report: SBE Latvia Ltd Page ii
3 Contents 1 Overview Description of the Supply Base General description Actions taken to promote certification amongst feedstock supplier Final harvest sampling programme Flow diagram of feedstock inputs showing feedstock type [optional] Quantification of the Supply Base Requirement for a Supply Base Evaluation Supply Base Evaluation Scope Justification Results of Risk Assessment Results of Supplier Verification Programme Conclusion Supply Base Evaluation Process Stakeholder Consultation Response to stakeholder comments Overview of Initial Assessment of Risk Supplier Verification Programme Description of the Supplier Verification Programme Site visits Conclusions from the Supplier Verification Programme Mitigation Measures Mitigation measures Monitoring and outcomes Detailed Findings for Indicators Review of Report Peer review Public or additional reviews Approval of Report Supply Base Report: SBE Latvia Ltd Page iii
4 13 Updates Significant changes in the Supply Base Effectiveness of previous mitigation measures New risk ratings and mitigation measures Actual figures for feedstock over the previous 12 months Projected figures for feedstock over the next 12 months Supply Base Report: SBE Latvia Ltd Page iv
5 1 Overview Producer name: Producer location: SIA SBE Latvia Ltd Griķi, Laucienes parish, Talsu district, LV , Latvia Geographic position: , Primary contact: Inga Luse, phone , luse@sbe.lv Company website: Date report finalised: 30/Jun/2016 Close of last CB audit: September 19, 2016 Griki, Laucienes parish, Talsu district Name of CB: NEPCon OU Translations from English: NA SBP Standard(s) used: Standard 2, version 1.0;; Standard 4, version 1.0;; Standard 5, version 1.0;; 5A instruction Version 1.0 Weblink to Standard(s) used: SBP Endorsed Regional Risk Assessment: Weblink to SBE on Company website: not applicable not applicable Indicate how the current evaluation fits within the cycle of Supply Base Evaluations Main (Initial) Evaluation First Surveillance Second Surveillance Third Surveillance Fourth Surveillance x Supply Base Report: SBE Latvia Ltd Page 1
6 2 Description of the Supply Base Most part of SIA SBE Latvia Ltd raw material is received from Latvian sawmills as by-products (sawmill residues). Small part of the same type of raw material indirectly comes from Lithuania and Norway. In reference period was suppliers total. SBP approved controlled feedstock: 23.21% (in reference period suppliers) SBP approved primary feedstock: 0% SBP approved secondary feedstock: 63.88% (in reference period suppliers) SBP approved tertiary feedstock: 0% SBP not approved feedstock: 12.91% (in reference period suppliers) Species of raw material: Aspen - Populus tremula;; Grey alder - Alnus incana;; Black Alder - Alnus glutinosa;; Silver birch - Betula pendula;; Downy birch - Betula pubescens;; Oak - Quercus robur (L.);; Ash - Fraxinus excelsior (L.);; Scots pine (whitewood) - Pinus sylvestris;; Norway spruce (redwood) - Picea abies;; Willow Salix alba. 2.1 General description In Latvia, forests cover area of hectares. According to the data of the State Forest Service (concerning the surveyed area allocated to management activities regulated by the Forest Law), woodenness amounts to 51.8 % (ratio of the hectares covered by forest to the entire territory of the country). The Latvian State owns ha of forest (48.97% of the total forest area), while the other ha (51.68 % of the total forest area) belong to other owners. Private forest owners in Latvia amount to approximately 144 thousand. The area covered by forest is increasing. The expansion happens both naturally and by afforestation of infertile land unsuitable for agriculture. Within the last decade, the timber production in Latvia has fluctuated between 9 and 13 million cubic metres (source: vmd.gov.lv, 2015). Forest land consists of: forests ha (91.3%);; marshes ha (5.3%);; open areas ha (1.1%);; flooded areas ha (0,5%);; objects of infrastructure ha (1.8%). (Source: vmd.gov.lv, 2015.) Supply Base Report: SBE Latvia Ltd Page 2
7 Distribution of forests by the dominant species: pine 34.3 %;; spruce 18.0 %;; birch 30.8 %;; black alder 3.0 %;; grey alder 7.4 %: aspen 5.4 %;; oak 0.3 %;; ash 0.5 %: other species 0.3 %. (Source: vmd.gov.lv, 2015.) Share of species used in reforestation, by planting area (2014): pine 20 %;; spruce 17 %;; birch 28 %;; grey alder 12 %;; aspen 20 %;; other species 3 %. (Source: vmd.gov.lv, 2015.) Timber production by types of cuts, by volume produced (2014): final cuts %;; thinning %;; sanitary clear-cuts 3.63 %;; sanitary selective cuts 1.43 %;; deforestation cuts 0.76 %;; other types of cuts 0.06 %. (Source: vmd.gov.lv, 2015.) The field of forestry In Latvia, the field of forestry is supervised by the Ministry of Agriculture, which in cooperation with stakeholders of the sphere develops forest policy, development strategy of the field, as well as drafts of legislative acts concerning forest management, use of forest resources, nature protection and hunting ( Supply Base Report: SBE Latvia Ltd Page 3
8 Implementation of requirements of the national law and regulations issued by the Cabinet of Ministers notwithstanding the type of tenure is carried out by the State Forest Service under the Ministry of Agriculture ( Management of the state-owned forests is performed by the public limited company Latvijas Valsts Meži, established in The enterprise ensures implementation of the best interests of the state by preserving value of the forest and increasing the share of forest in the national economy ( The share of forestry, wood-working industry and furniture production amounted to 6 % GDP in 2012, while export yielded 1.7 billion euro (17 % of the total amount). Biological diversity Historically, extensive use of forests as a source of profit began later than in many other European countries, therefore a greater biological diversity has been preserved in Latvia. For the sake of conservation of natural values, a total number of 674 protected areas have been established. Part of the areas have been included in the European network of protected areas Natura Most of the protected areas are state-owned. In order to protect highly endangered species and biotopes located without the designated protected areas, if a functional zone does not provide that, microreserves are established. According to data of the State Forest Service (2015), the total area of microreserves is ha. Identification and protection planning of biologically valuable forest stands is carried out continuously. On the other hand, for preservation of biological diversity during forest management activities, general nature protection requirements binding to all forest managers have been developed. They stipulate that at felling selected old and large trees, dead wood, undergrowth trees and shrubs, land cover around microdepressions are to be preserved, thus providing habitat for many organisms. Latvia has been a signatory of the CITES Convention since CITES requirements are respected in forest management, although there are no species from CITES lists fauna in Latvia. Forest and community Areas where recreation is one of the main forest management objectives add up to 8 % of the total forest area or ha (2012). Observation towers, educational trails, natural objects of culture history value, picnic venues: they are just a few of recreational infrastructure objects available to everyone free of charge. Special attention is devoted to creation of such areas in state-owned forests. Recreational forest areas include national parks (excluding strictly protected areas), nature parks, protected landscape areas, Supply Base Report: SBE Latvia Ltd Page 4
9 protected dendrological objects, protected geological and geomorphologic objects, nature parks of local significance, the Baltic Sea dune protection zone, protective zones around cities and towns, forests within administrative territory of cities and towns. Management and governance of specially protected natural areas in Latvia is co-ordinated by the Nature Conservation Agency under the Ministry for Environmental Protection and Regional Development. Certification The forests of both the public limited company Latvijas valsts meži and private owners may be certified against sustainable forest management standards, whereas woodworking enterprises can contribute to sustainable forest management by certification against the chain of custody system requirements. Both the FSC and PEFC systems have found their way into Latvia. Lithuania, forest resources Agricultural land covers more than 50 percent of Lithuania. Forested land consists of about 28 percent, with 2,17 million ha, while land classified as forest corresponds to about 30 percent of the total land area. The southeastern part of the country is most heavily forested, and here forests cover about 45 percent of the land. The total land area under the state Forest Enterprises is divided into forest and non-forest land. Forest land is divided into forested and non-forested land. Forest land is divided into four protection classes: reserves (2 %);; ecological (5.8 %): protected (14.9 %);; and commercial (77.3 %). In reserves all types of cuttings are prohibited. In national parks, clear cuttings are prohibited while thinnings and sanitary cuttings are allowed. Clear cutting is permitted, however, with certain restrictions, in protected forests;; and thinnings as well. In commercial forests, there are almost no restrictions as to harvesting methods. Lithuania is situated within the so-called mixed forest belt with a high percentage of broadleaves and mixed conifer-broadleaved stands. Most of the forests - especially spruce and birch - often grow in mixed stands. Pine forest is the most common forest type, covering about 38 percent of the forest area. Spruce and birch account for about 24 and 20 percent respectively. Alder forests make up about l2 percent of the forest area, which is fairly high, and indicates the moisture quantity of the sites. Oak and ash can each be found on about 2 percent of the forest area. The area occupied by aspen stands is close to 3 percent. The growing stock given as standing volume per hectare is on the average of l80 m 3 in Lithuania. In nature stands, the average growing stock in all Lithuanian forests is about 244 m 3 per hectare. Total annual growth comes to m 3 and the mean timber increment has reached 6.3 m 3 per year and per hectare. Supply Base Report: SBE Latvia Ltd Page 5
10 Current harvest has reached some 3.0 million m 3 u.b. per year. The consumption of industrial wood in the domestic forest industry, including export of industrial wood, is estimated to be less than 2.0 million m 3. The remainder is used for fuel or stored in the forests, with a deteriorating quality as a result. The potential future annual cut is calculated at 5.2 million m 3, of which 2.4 million m 3 is made up of sawn timber and the remaining 2.8 million m 3 of small dimension wood for pulp or board production, or for fuel. The figures refer to the nearest 10-year period. Thereafter a successive increase should be possible if more intensive and efficient forest management systems are introduced. Certification of the state forests in Lithuania is done according to the strictest certification in the world the FSC (Forest Stewardship Council) certificate. The audit of this certificate testifies to the fact that Lithuanian state forests are managed especially well following the principles of the requirements set to protection of and an increase in biological diversity. (Resources: Norway, forest resources Forest facts About 38% of the surface area in Norway is covered by forest. The total forested area amounts to 12 million hectares, including more than 7 million hectares of productive forest. 15% of the productive forest has been estimated as non-economic operational areas due to difficult terrain and long distance transport, which means that economical forestry may only be operated in about 50% of the forested area. The most important species are Norway spruce (47%), Scots pine (33%) and birch (18%). From the forest area: Privately owned forests 80 % ;; State and municipalities 12 % Industrial private 4 %;; Local common land 4 % Forest certification All productive forests in Norway are certified, i.e hectares. The number of certified forest owners is approximately (private, municipalities, state). Supply Base Report: SBE Latvia Ltd Page 6
11 Forest protection Areas protected under the Nature Conservation Act 2008 Biodiversity Approximately 6.4% of mainland Norway has protected area status. In addition, 15,000 square km of Spitsbergen is designated as conservation area - national parks, nature reserves or other kinds of protected area cover 10-12% of the area of the remote islands. The total number of species in Norway is estimated to be 45,000, of which approximately 33,000 are known and described. It exists information enough to estimate wether a species is threatened or not for only 10,000 species. Of these, 150 are threatened by extinction, 279 are deemed vulnerable, 800 are categorized as rare (the last number also includes species which are rare of natural causes, and not only because of human intervention). 359 are deemed species of special concern, 36 species are indeterminate, while 169 species are classified as insufficiently known. Species "Red lists" can be used to point out the habitats containing an especially rich variety of endangered species. Red list species have often proved to be the red warning lights of nature to tell us that a biotope is threatened or something else is wrong in nature. The red lists also give us a picture of the condition of our flora and fauna, and may contribute to the efforts of securing and improve the ecosystem for these species. In the country there are areas of endangered high conservation value forests. More specifically there are Global200 and IFL areas in the northern mountain regions. Supply Base Report: SBE Latvia Ltd Page 7
12 Those regions identified by Conservation International as a Biodiversity Hotspot efault.aspx Those forest, woodland, or mangrove ecoregions identified by World Wildlife Fund as a Global 200 Ecoregion and assessed by WWF as having a conservation status of endangered or critical. Those regions identified by the World Resources Institute as a Frontier Forest Intact Forests Landscapes, as identified by Greenpeace ( Forest sector in Norway s national economy In 2006 forestry and the forest industries accounted for about 0.8% of the Gross National Product in Norway. Of the total employment of persons in Norway approximately people receive their income from forestry and from the forest industry persons (0.3%) are directly employed in forestry. About 50 percent of the Norwegian round wood harvested is used by sawmills. There are 225 sawmills in Norway operating on an industrial scale. Forestry and forest industry as part of the GNP A lot of people use the forest for recreational activities, both traditional and modern, including walking, picking berries and mushrooms, hunting and fishing. Supply Base Report: SBE Latvia Ltd Page 8
13 2.2 Actions taken to promote certification amongst feedstock supplier The company concludes long-term procurement contracts with enterprises that have attested their participation in wood chain of custody certification. The objective of the chain of custody system is to provide information on the origin of forest raw materials down from the point of delivery. During preparation for SBP certification, the company has increased the share of FSC-certified raw materials from 20 to 70 %, and the management of the company has decided to increase procurement of FSC Mix Credit materials by more than 70 % between March and December Thus, all involved companies from the forest management and logging enterprises to woodworking sphere are interested that sustainable forestry methods are attested. The company procures wood for pellet production mainly from woodworking enterprises of Kurzeme region, which in turn procure round wood from the FSC and PEFC-certified public limited company Latvijas Valsts Meži and Latvia s forests. SBE Latvia requests its suppliers to provide information about wood origin and legal procurement document. SBE Latvia gives priority to suppliers sourcing for their production FSC certified wood originating from Lithuania and Norway. Woodworking residues are procured from woodworking enterprises that mainly produce sawn materials and other products. Motivation for getting certified for those enterprises is the fact that support to sustainable forest management by certified chain of custody increases sales opportunities for both main and side products 2.3 Final harvest sampling programme Not applicable 2.4 Flow diagram of feedstock inputs showing feedstock type [optional] Supply Base Report: SBE Latvia Ltd Page 9
14 Coniferous species % (sawdust), Deciduous species % (sawdust). 2.5 Quantification of the Supply Base Supply Base a. Total Supply Base area 12.2 milj (ha): cumulative area of all forest types within SB b. Tenure by type (ha): Government 8,2 milj., ha;; Privately owned 2,2 milj., ha;; / Local government 1,2 milj. H/ a other 0,6 milj., ha c. Forest by type (ha): Boreal 5,2 milj,. ha /Temperate 7mil., ha d. Forest by management type (ha): managed natural 12.2 milj., ha e. Certified forest by scheme (ha): 9,6 milj. ha FSC or PEFC-certified forest Feedstock f. Total volume of Feedstock: m 3 g. Volume of primary feedstock: 0 m 3 h. List percentage of primary feedstock (g), by the following categories. - percentages may be shown in a banding between XX% to YY% if a compelling justification is provided*. Subdivide by SBP-approved Forest Management Schemes: Not applicable - Certified to an SBP-approved Forest Management Scheme - Not certified to an SBP-approved Forest Management Scheme i. List all species in primary feedstock, including scientific name.not applicable j. Volume of primary feedstock from primary forest. Not applicable k. List percentage of primary feedstock from primary forest (j), by the following categories. Subdivide by SBP-approved Forest Management Schemes: Not applicable - Primary feedstock from primary forest certified to an SBP-approved Forest Management Scheme Supply Base Report: SBE Latvia Ltd Page 10
15 - Primary feedstock from primary forest not certified to an SBP-approved Forest Management Scheme l. Volume of secondary feedstock: m 3 SAWDUST (Sawmill residue) feedstock as production waste from producers com from Latvia, Lithuania, Norway m. Volume of tertiary feedstock: 0% - 19%. Supply Base Report: SBE Latvia Ltd Page 11
16 3 Requirement for a Supply Base Evaluation SBE completed SBE not completed x SBE system is not implemented, because more than 60% from total input of secondary feedstock is FSC Mix Credit or 100% PEFC Certified. For the next period the company (SBE Latvia Ltd) has enough FSC and PEFC certified material in order to fulfil sales plan of SBP certified pellets. Supply Base Report: SBE Latvia Ltd Page 12
17 4 Supply Base Evaluation 4.1 Scope Not applicable 4.2 Justification Not applicable 4.3 Results of Risk Assessment Not applicable 4.4 Results of Supplier Verification Programme Not applicable 4.5 Conclusion Not applicable Supply Base Report: SBE Latvia Ltd Page 13
18 5 Supply Base Evaluation Process Not applicable Supply Base Report: SBE Latvia Ltd Page 14
19 6 Stakeholder Consultation Not applicable to SBP approval if SBE is out of scope. 6.1 Response to stakeholder comments Not applicable Supply Base Report: SBE Latvia Ltd Page 15
20 7 Overview of Initial Assessment of Risk Not applicable Supply Base Report: SBE Latvia Ltd Page 16
21 8 Supplier Verification Programme 8.1 Description of the Supplier Verification Programme Not applicable. 8.2 Site visits Not applicable 8.3 Conclusions from the Supplier Verification Programme Not applicable Supply Base Report: SBE Latvia Ltd Page 17
22 9 Mitigation Measures 9.1 Mitigation measures Not applicable. 9.2 Monitoring and outcomes Not applicable. Supply Base Report: SBE Latvia Ltd Page 18
23 10 Detailed Findings for Indicators Not applicable. Supply Base Report: SBE Latvia Ltd Page 19
24 11 Review of Report 11.1 Peer review The final version of the report was submitted to the Forestry and forest-environment processes to engage professionals. The report was reviewed and returned with comments were received from: WWF International Director Janis Rozītis- experience in sustainable forestry practice, assessment Sigitas Girdziušas- Lithuanian Agricultural University, Master of Forestry, forestry specialists Public or additional reviews For interested stakeholders the SBR is available to view on company s homepage: all comments can be sent to info@sbe.lv. Supply Base Report: SBE Latvia Ltd Page 20
25 12 Approval of Report Approval of Supply Base Report by senior management Report Prepared by: Ilze Ļutjanska SIA SBE Latvia Ltd quality manager Name Title Date The undersigned persons confirm that I/we are members of the organisation s senior management and do hereby affirm that the contents of this evaluation report were duly acknowledged by senior management as being accurate prior to approval and finalisation of the report. Report approved by: Māris Ziediņš SIA SBE Latvia Ltd director Name Title Date Report approved by: [name] [title] [date] Name Title Date Report approved by: [name] [title] [date] Name Title Date Supply Base Report: SBE Latvia Ltd Page 21
26 13 Updates To increase amount of SBP Compliant Biomass SIA SBE Latvia Ltd went through PEFC certification and got the PEFC Certificate in February Total amount of certified raw material input has risen from 42% since April 2015 to 89% till March Species of raw material: Aspen - Populus tremula;; Grey alder - Alnus incana;; Black Alder - Alnus glutinosa;; Silver birch - Betula pendula;; Downy birch - Betula pubescens;; Oak - Quercus robur (L.);; Ash - Fraxinus excelsior (L.);; Scots pine (whitewood) - Pinus sylvestris;; Norway spruce (redwood) - Picea abies;; Willow Salix alba Significant changes in the Supply Base Not applicable Effectiveness of previous mitigation measures Supply Base a. Total Supply Base area 12.2 milj (ha): cumulative area of all forest types within SB b. Tenure by type (ha): Government 8,2 milj., ha;; Privately owned 2,2 milj., ha;; / Local government 1,2 milj. H/ a other 0,6 milj., ha c. Forest by type (ha): Boreal 5,2 milj,. ha /Temperate 7mil., ha d. Forest by management type (ha): managed natural 12.2 milj., ha e. Certified forest by scheme (ha): 9,6 milj. ha FSC or PEFC-certified forest Feedstock f. Total volume of Feedstock: m 3 g. Volume of primary feedstock: 0 m 3 h. List percentage of primary feedstock (g), by the following categories. - percentages may be shown in a banding between XX% to YY% if a compelling justification is provided*. Subdivide by SBP-approved Forest Management Schemes: Not applicable - Certified to an SBP-approved Forest Management Scheme - Not certified to an SBP-approved Forest Management Scheme i. List all species in primary feedstock, including scientific name.not applicable j. Volume of primary feedstock from primary forest. Not applicable Supply Base Report: SBE Latvia Ltd Page 22
27 k. List percentage of primary feedstock from primary forest (j), by the following categories. Subdivide by SBP-approved Forest Management Schemes: Not applicable - Primary feedstock from primary forest certified to an SBP-approved Forest Management Scheme - Primary feedstock from primary forest not certified to an SBP-approved Forest Management Scheme l. Volume of secondary feedstock: m 3 SAWDUST (Sawmill residue) feedstock as production waste from producers com from Latvia, Lithuania, Norway n. m. Volume of tertiary feedstock: 0% - 19% New risk ratings and mitigation measures Not applicable Actual figures for feedstock over the previous 12 months Secondary feedstock bands are m Projected figures for feedstock over the next 12 months Secondary feedstock bands will be m3. Tertiary feedstock bands will be 0% - 19%. Supply Base Report: SBE Latvia Ltd Page 23
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